LondonAustralia’s love affair with British online retailer ASOS is well and trulyover.

One of the hottest and fastest ­growing fashion brands in the country in recent years – 13 months ago it was flying four jumbo jets full of clothing to Australia each week – ASOS is now going backwards due to a weaker Aussie dollar and ­slowing demand.

The slump in demand from young fashionistas and internet-savvy ­shoppers was revealed after founder and chief executive Nick Robertson announced a surprise profit warning in London on Thursday.

Investors took an axe to the share price with ASOS shares down almost 50 per cent in early trade before ­recovering slightly to be down by about a third. ASOS shares – which hit £71.95 in February – were at £31 in ­afternoon trade.

Australia had been the company’s biggest overseas market outside the United States. ASOS launched a ­dedicated Australian website in 2012, and later set up its first non-UK office in Sydney. In previous briefings ASOS management has talked about local customer buying clothing by the jumbo load and logging orders every seven seconds.

It was regularly held up as an ­exemplar of the threat online retailers pose to traditional “bricks and mortar" retailers such as Myer and David Jones.

But much of Mr Robertson’s ­conference call on Thursday was ­dedicated to the problems faced by its Australian operations. The main problem has been the strength of the British pound against the local currency.

Mr Robertson said currencies in Australia and Russia were down more than 20 per cent against the pound.

Related Quotes

Company Profile

Investors were told Australia was the company’s biggest “rest of the world" territory, which includes Australia, ­Russia, China but not the US and Europe, which are broken out ­separately. But it was now the third largest with about 8 per cent of total sales. International retail sales account for 62 per cent of total sales. Mr Robertson said Australian ­customers faced an average 15 per cent increase in prices compared with a 7 per cent drop for UK customers. As a result, Australia was the only country that went backwards by the key ­“frequency of purchase" measure. He added the traffic had “fallen away" as the Australian customer “accepted [ASOS] was going to be more expensive and switched to a domestic channel".

This backs up research by National Australia Bank that shows domestic online sales are growing faster than international online sales.

The CEO said the “wobbles" ASOS had noticed in Australia in July last year had continued with discounting and promotions hurting earnings.

While “loyal" customers had ­continued to shop with ASOS – basket size was up in all countries – Mr ­Robertson said more marginal ­shoppers in countries such as Australia “have opted to not visit the site".

Asos trimmed its forecast profit ­margins to 4.5 per cent from 6.5 per cent, which would suggest a £45 million ($81 million) net profit compared to the previous forecast of £65 million for the year ended August 31.

US sales were up 17 per cent for the first three quarters compared with 59 per cent a year ago, while sales growth across Europe of 37 per cent compared with a 56 per cent rise a year earlier. For the rest of the world, sales growth slowed to just 1 per cent compared with 38 per cent in the previous year.